Starbucks Situation Underscores Reputation Hazards in Digital Era

Starbucks logo on a Starbucks cafe in the city center of Toronto, Ontario. The brand is one of the leaders in coffee service in Canada and worldwide

Starbucks has approximately 27,000 locations and an employee base of about 238,000. But an incident at one shop involving one worker was enough to transform the perception of the entire brand in the eyes of many.

To be clear, the Philadelphia-based incident in April was terrible. Two black men, Rashon Nelson and Donte Robinson, made a routine visit to a Starbucks and were waiting for a friend to arrive so they could grab coffee and talk real estate. An employee accused them of trespassing because they hadn’t yet ordered anything, and officers arrived on the scene and forcefully arrested the men.

The video has been viewed more than 10 million times and sparked nationwide outrage. This serves as a stark reminder of just how quickly a company’s entire culture can be called into question due to an isolated incident and just how rapidly word can spread in the age of social media. Think of the United Airlines incident, in which a passenger was dragged off an overbooked flight, as another example.

It begs the question of whether your company has a crisis plan in place for a potentially damaging incident on one of your properties, even if that incident is on a smaller scale than those that have recently grabbed headlines. Naturally, you hope such a crisis never arises and you might anticipate one never will. But you have to have a plan in place, because how swiftly and professionally you react to such an incident can make a profound difference on the overall impact to your reputation.

A primary takeaway from the Starbucks situation: even if each of the 27,000 other stores had an incident-free day, one viral incident has seemingly limitless power. As a result, Starbucks received hundreds of negative Yelp reviews, many of those from outside the geographic area. The review volume was so high – and many were based on initial incomplete reports of the incident – that it caused Yelp to review its policies.

As part of Starbucks’ crisis management effort, the coffee giant closed 8,000 stores for a few hours on May 29 for nationwide racial bias training. The company is now prominently incorporating an “everyone is welcome” mantra into its materials.

In the case of Starbucks, they’ll survive. Many individuals simply have to have their coffee, and drive-thru lines remain long. But can a less popular brand withstand such a negative hit to the reputation and continue to flourish?

Lesson learned for apartment professionals: Even if you have a portfolio of 500 communities, an incident at one of them can have a pronounced negative impact on your brand. Are you prepared to react if it happens?

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